If you have been grinding away at your company for a decade or two, you may be facing the same fork in the road Andrew Roberts hit with his text editing software, Tiny: keep a comfortable, profitable business and live off dividends, or double down on growth, bring in outside capital, and aim for a much bigger exit.
Andrew started with a small family business in Brisbane and ended up selling to private equity for roughly ten times the capital invested. Along the way, he had to deal with customer concentration, early investors who wanted liquidity, venture capital terms, and the decision to roll a meaningful chunk of his proceeds into a company he no longer controlled.
In this week’s episode of Built to Sell Radio, you learn how to
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Value an acquisition target using the cost of replicating its organic traffic rather than a simple revenue multiple.
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Value your stock when using it as a currency to buy another company.
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See your own dependency on a single partner or customer the way an acquirer will see it.
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Decide whether to cruise in a dividend-paying business or push for faster growth with outside capital.
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Use dividends and buybacks to give early investors and family members a path to liquidity without selling the company.
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Think about how much equity to roll into a PE deal
If you are an experienced, pragmatic founder wrestling with the cruise-versus-double-down decision, Andrew’s story gives you a clear window into the tradeoffs on both sides.
Quote of the Week
We had shareholders who wanted liquidity, you know, shareholders who’d been in it for a long time… even family shareholders who wanted their money back.
Deals
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Colorado-based In-Situ, a company that makes sensors and software used to measure and monitor water quality in lakes, rivers, and groundwater, is being acquired by Veralto for $435 million (about $422 million after tax benefits). In-Situ has been growing at a high-single-digit rate and is expected to bring in roughly $80 million in sales in 2025, implying a valuation of about 5.3x revenue.
